Steel Mills

US Steel Gary Up to 3 Blast Furnaces

April 27, 2014

Steel Market Update has been carefully watching the progress of iron ore shipments to U.S. Steel Gary Works. Earlier this month, US Steel reported the curtailment of steelmaking operations at the Gary Works plant. The Gary steel mill is the largest production facility for US Steel with four blast furnaces and two BOP’s with three vessels which, when running to capacity, are capable of producing approximately 9 million tons of flat rolled steel on an annual basis.

When we last reported on US Steel operations, the Gary Works facility was known to have two furnaces running at that time at reduced rates as iron ore receipts were still less than desirable.

Since then we have tracked a number of vessels from Two Harbors, Minnesota, where vessels are loaded with iron ore pellets for the Gary Works facility. The time it is taking to move from Gary to Two Harbors and back has been shrinking as U.S. and Canadian ice breakers lead convoys and, equally important, the ice is beginning to melt.

Our sources are now advising SMU that the Gary Works facility has three furnaces running at reduced capacities. We believe the plant is running at approximately 75 percent of capacity.

Over at USS Great Lakes, our sources are advising us that OSHA has released the plant to continue repairs to the roof and main collector pipe over the #2 BOP (basic oxygen process or furnace). The current estimate is for repairs to be finished sometime during the week of May 5th and the vessels able to produce hot metal at that time. This will be tricky as the #2 BOP has been cold since the original accident.

US Steel will announce earnings on Tuesday of this week and we anticipate that the status of the two plants will be high on the list of questions for the US Steel CEO.